And that means certain industries -- particularly those that sell discretionary goods such as cars and jewelry -- are likely to feel the pain as consumers tighten up their purse strings.

Consumers are paying close attention to what's happening in Washington. According to a Gallup poll, 62% of Americans are following the fiscal cliff budget negotiations "very or somewhat closely." The poll was conducted via phone interviews of 1,022 adults over the weekend.

More than two-thirds of respondents say increases in federal income and Social Security payroll taxes along with major cuts in domestic spending would hurt the country. And 68% say if government leaders fail to agree and the fiscal cliff measures take effect, their personal financial situation would worsen.

"Without a doubt, nearly all Americans will see the effects of the fiscal cliff in their wallets. A complete elimination of recent tax cuts could lead the nation to a double-dip recession, as consumers significantly reduce their spending and create a drag on GDP," according to an IBISWorld report.

The report identified three industries -- automotive, entertainment and apparel -- that will be most severely hurt by tax increases.

"When disposable income declines, nonessential items, such as entertainment, travel and fashion apparel, are the first to be cut from a household's budget," the report says. Those industries "are highly sensitive to changes in per capita disposable income, meaning that a small decrease in income results in a disproportionately large drop in industry revenue."

1. Automotive

IBISWorld names the car industry, including manufacturers Ford (F) , General Motors (GM) and Toyota (TM) , but also dealerships, gas stations and car-service providers such as car washes, as "one of the U.S. economy's worst-hit victims" if no deal is agreed upon.

"Cars are highly discretionary and expensive purchases that require significant maintenance, so a reduction in disposable income would force consumers to delay new purchases over the next couple of years," the report says.

From 2007-2012, the auto sector had an aggregate 3.1% average annual decline in revenue due to the combination of falling disposable incomes and increasing prices. Crude oil volatility also didn't help the sector, IBISWorld says.

"The automotive sector's high sensitivity to consumers' purchasing power ultimately resulted in high revenue volatility during the past five years," IBISWorld says, adding that a fiscal cliff on top of already high and volatile gas prices does not bode well for the sector over the next five years.